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Insurance Risk Reduction: Can a Security Firm Help?

Insurance Risk Reduction: Can a Security Firm Help?
Insurance Risk Reduction: Can a Security Firm Help?

Insurance risk can vary significantly between businesses and buildings while making a big difference to the insurance premiums you are offered – and the number of insurance providers willing to extend coverage.

Whether you own a company, a plot of land or an investment property, any insurance subject that is considered high-risk will be trickier to insure and cost more. Insurers assess a wide number of variables when determining risk and may use complex appraisals depending on the type of insurance you need.

Clearway explains some of the core factors that will influence the risk an insurer associates with your business or premise, and how effective, professional security solutions can address any issues or vulnerabilities.

How Does an Insurance Provider Assess Risk?

There isn’t a quick or straightforward answer because insurance risk assessments will depend on what you need to insure and against what occurrences.

For example, an insurer will almost certainly refer to an underwriter and require an independent survey before insuring a complex business. However, they might conduct a desktop risk assessment for a simpler scenario where your required cover is worth a much smaller value.

As an indication, your insurer will be more likely to carry out a detailed risk review if you need insurance for:

  • All-risks property or business coverage – this policy covers any potential risk, the contents and structure itself, and applies in a fire, flood or theft.
  • High-value or specialised equipment insurance, where the cost of replacing industrial machinery or tooling may be extremely high.
  • Business interruption insurance where the turnover or size of the business could generate a considerable payout in the event of a valid claim.

Businesses without an established trading history, or where there are additional risks to consider, such as high-heat processing, a greater likelihood of insolvency or records of multiple insurance claims, may be subject to more in-depth appraisals before securing the appropriate insurance.

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Which Security Measures Make a Difference to Insurance Risk?

Choosing the right security services can make a marked difference to the cost of your insurance.

Reducing the likelihood of a theft or break-in, implementing robust surveillance or alarm systems, or having your premises monitored 24/7 by an accredited alarm receiving centre, for example, will decisively reduce the risk the insurer associates with your property.

Some insurers also offer specific discounts or coverage options for applicants who comply with their preferred criteria. They might stipulate that discounted premiums are available for businesses with commercial-grade security cameras, properties with regular security patrols, or those with a certain grade of locks or security screens.

However, we wouldn’t advise every business to invest in cutting-edge security offhand because the right solutions will depend on the location of the property or organisation, the type of security already in place, and the type and value of insurance coverage you require.

For example, if you own a warehouse adjacent to a large area of open land, adding access controls at your front entrance may make a minimal difference to your overall risk profile if intruders can easily access the property on foot or via vehicle through a rear boundary.

A better option would be to consider concrete barrier blocks or anti-climb fencing, responsive CCTV cameras or mast-mounted cameras that can cover the breadth of the perimeter and ongoing monitoring, where any suspicious activity is immediately identified and investigated so an appropriate security response can be deployed.

Can Poor Security Disqualify a Business or Property From Insurance?

If an insurance applicant has inadequate security that presents an unacceptable level of risk, the insurer may refuse to offer coverage.

Conditions of coverage are mandatory requirements to be eligible for an insurance product and might involve a certified alarm system or minimum on-site security presence.

Insurers focused on niche industries or sectors may also impose compulsory requirements to qualify for coverage. These additional provisions may apply to construction sites, heavy-duty industrial enterprises, multi-storey office blocks or investment properties, or any business or environment with a complex or elevated risk profile.

Our security experts can provide further guidance, with specialist consultants available working within construction, industrial, public sector, highways and rail and property management applications to offer more targeted advice about how to achieve effective risk reduction.

How Can a Security Firm Help to Reduce Business or Premise Risks?

As our brief example shows, the risks that pose the greatest issue to an insurer and present the biggest hazard for your business or property will always differ. Managing risk is an exercise tailored to the site or business, with variables around threats, environmental risks and intruder-based hazards.

Clearway has years of experience working with businesses, public sector clients and private individuals across all sectors and offers exceptional quality security consultancies, risk assessment inspections and services ranging from Commercial CCTV installation and alarm monitoring services to physical manned guarding services, advanced technological security solutions to wearable safety devices and security towers.

Most businesses will find that a few simple upgrades, such as an alarm system, quality locks and CCTV surveillance, will help to reduce insurance risks, with security management systems, up-to-date risk assessments, and business crisis management protocols often perceived as beneficial from an insurer’s perspective.

However, the right way to improve your insurance risk and lower your insurance premiums is to work with a professional security firm that can make bespoke recommendations to ensure your property or business is easier to insure and less exposed to potential threats.

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What Is the Quickest Way to Reduce Commercial Insurance Premiums?

If you have a current insurance policy and feel the premiums are excessively high, you may be interested in making some speedy adjustments to bring this cost down. The first step would be to review your insurance policy and contract terms since these will dictate whether you have the flexibility to cancel your policy at any time or are locked into the premium until the contract ends.

Either way, you could reduce your premiums by volunteering to pay a higher excess in the event of a claim or avoiding lodging small claims with a minimal value where the cost of replacing the asset or item in question is negligible and will not have a negative impact.

From there, identifying the major risks in play is essential, alongside reviewing the details within your insurance coverage to assess any conditions of cover, stipulations or exclusions the existing insurance provider has noted.

Customised security solutions adapted to the risks linked to your property or premise are always ideal, and when it comes time to renew your policy or invite quotations from other insurers, a proactive approach to risk management and mitigation will put you in a great position.

For more information about arranging an independent security risk assessment, discussing the risks affecting your insurance costs, or evaluating your insurance risk profile from an outside perspective, please get in touch.

Scott Bowers

Scott Bowers

Insurance Director

Scott is an experienced, results driven director, used to managing client relationships at senior/board level, both UK and internationally.
He’s a successful, self-motivated commercially-focused individual with a track record of surpassing challenging goals. Scott has worked within the Legal Services, Insurtech, Insurance, Utility, Counter Fraud and in Investigations for the past 25 years.
As a seasoned Sales Director, Scott has over 20 years’ executive-level experience in B2B & B2C SaaS sales solutions and is passionate about technology & innovation and delivering an excellent experience to customers.

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